Chinese electric vehicle (EV) giant BYD (BYDDY) (HK:1211) is raising about $5.2 billion through a share sale in Hong Kong, Reuters reported. This move is part of the company’s efforts to bolster its financial position and support its growth plans in the highly competitive EV market.
According to the term sheet seen by Reuters, BYD has set a price range of HK$333 to HK$345 per share for the offering. This reflects a discount of up to 8.4% compared to Monday’s closing price.
The share sale will be conducted through an accelerated book-building process, which allows the company to quickly gauge investor interest and finalize the offering.
BYD Fuels Growth with Share Sale
With this move, BYD aims to strengthen its financial position and support its long-term growth plans. The proceeds from the share sale will be used to fund investments in research and development. This includes advancements in battery technology and autonomous driving solutions.
Moreover, a portion of the proceeds will be used to expand the company’s presence in international markets, particularly in Europe and North America, where EV demand is growing rapidly. The funds will also support BYD’s working capital and general corporate purposes.
Growth Potential in Hong Kong’s EV Market
The EV market in Hong Kong is witnessing growth, driven by government initiatives and rising consumer awareness of EV benefits. According to Statista, the market is expected to grow at an annual rate of 6.88% over the next five years, reaching a value of $2.1 billion by 2029.
Further, better battery technology and lower EV costs are making these vehicles more affordable and easier to access for more people, which will likely boost demand.
It is worth mentioning that the news follows BYD’s impressive delivery numbers for February. Last month, BYD delivered 322,846 vehicles, reflecting a 7.4% increase from January and a stellar 164% year-over-year surge. This growth is driven by the robust demand for both plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
Overall, the company’s strong hold in China and efforts to expand internationally keep it well-poised for long-term growth.
Is BYDDF a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BYDDF stock based on seven unanimous Buys assigned in the past three months. At $56.12, the average BYD Co. stock price target implies a 17.04% upside potential. Year-to-date, shares of the company have gained 41.03%.
